TIDMPXS
RNS Number : 7101P
Provexis PLC
22 June 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
22 June 2022
Provexis plc
('Provexis' or the 'Company')
DSM Transfer of Business agreement for Fruitflow(R)
DSM Premix and Market-Ready Solutions supply agreement for
Fruitflow(R)
Patent application - the use of Fruitflow(R) in modulating the
gut microbiome
Provexis, the business that develops, licenses and sells the
proprietary, scientifically-proven Fruitflow(R) heart-health
solutions ingredient, entered into an Alliance Agreement (the
'Alliance Agreement') for Fruitflow(R) with DSM Nutritional
Products ('DSM') in June 2010, with a contractual term which runs
to 31 December 2022.
Provexis announced in September 2021 that the Company and DSM
were engaged in constructive negotiations working towards a new
agreement for Fruitflow for the period after 31 December 2022 to
replace the Alliance Agreement, and the Company is pleased to
announce that the parties have concluded their negotiations and
have now entered into (i) a Transfer of Business agreement for
Fruitflow and (ii) a Premix and Market-Ready Solutions supply
agreement for Fruitflow, both to take effect from 1 January
2023.
The Company is also delighted to announce the filing of a new
patent application relating to the use of Fruitflow to confer
health benefits in modulating the gut microbiome of humans. This
follows the completion of a successful human study, the results of
which (as stated in the patent application) strongly support the
use of Fruitflow for modulating gut microbiota to confer a number
of health benefits.
Under the terms of the two new agreements with DSM, and the new
patent application:
-- DSM's existing and prospective pipeline customers for
Fruitflow as a straight ingredient (not a Premix or Market-Ready
solution) will transfer to become direct customers of Provexis WEF
1 January 2023. The customers which are set to be transferred to
Provexis represent a significant majority of DSM's total sales of
Fruitflow in the calendar year ended 31 December 2021; the total
projected annual sales value of the prospective sales pipeline for
Fruitflow continues to stand at a substantial multiple of existing
annual sales.
-- DSM will help facilitate the transfer of its wholly
outsourced supply chain / production process for Fruitflow from DSM
to Provexis with effect from 1 January 2023.
-- A royalty will be payable to DSM on the gross profits
generated from Fruitflow sales to customers transferred from DSM
over the first four years of the Transfer of Business
agreement.
-- From 1 January 2023 the net profit accruing to Provexis on
sales of Fruitflow in the calendar year - on a pro-forma basis,
assuming like for like sales and margins - would be materially
ahead of the net share of the profit that would have accrued to
Provexis with like for like sales and margins under the existing
2010 Alliance Agreement; on the same pro-forma basis, assuming like
for like sales and margins, the net profit accruing to Provexis
would further increase in each of the subsequent three calendar
years.
-- A new partnership with DSM has been agreed relating to the
gut microbiome patent, with digestive health and the gut microbiome
being a key area of strategic focus for DSM as more fully set out
here
www.dsm.com/human-nutrition/en/customized-services/customized-solutions/health-benefit-solutions/improve-your-gut-health.html
. This partnership will give DSM preferential access to the use,
marketing, and sale of Fruitflow based products which are based on
the patent, subject to certain milestones which have been agreed
between the parties. Provexis and DSM are keen to progress this
encouraging new technology towards an early commercial launch of
products which are based on it.
-- The results of the successful gut microbiome human study will
be submitted in due course for publication in a peer reviewed
scientific journal. The patent application (i) states that the
results of the human study strongly support the use of Fruitflow
for modulating gut microbiota to confer a number of health
benefits, and (ii) sets out some potential new uses for Fruitflow
in treating a wide variety of human health conditions, beyond
Fruitflow's existing established use in heart-health. The global
digestive health market size was US$38 billion in 2019 and it is
projected to grow to US$72 billion in 2027 at a high single-digit
CAGR in the 2020-2027 period (see
www.fortunebusinessinsights.com/digestive-health-market-104750
).
-- Provexis will sell Fruitflow as a straight ingredient to DSM
exclusively for use in DSM's Premix Solutions (
www.dsm.com/human-nutrition/en/customized-services/customized-solutions/premix-solutions.html
) and Market-Ready Solutions (
www.dsm.com/human-nutrition/en/customized-services/customized-solutions/market-ready-solutions.html
) businesses, with DSM then looking to sell the resulting Premix
and Market-Ready Solutions products on to its customers. DSM's
Premix and Market-Ready Solutions businesses are part of DSM's
Customized Solutions business which also offers personalised
nutrition solutions to customers, a rapidly developing growth area.
The Company looks forward to supporting DSM and its Premix and
Market-Ready Solutions customers for many years to come.
-- A number of DSM's customers for Fruitflow which are set to be
transferred to Provexis have been Fruitflow customers for several
years, including some distributor customers which sell Fruitflow on
to third parties. The Company greatly looks forward to progressing
these existing sales relationships, and confirms it will be able to
generate new customers for Fruitflow outside the royalty
arrangements with DSM, in addition to its existing supply and
distribution agreement for Fruitflow with By-Health. The Company is
in discussion with a number of third parties seeking to progress
new sales and distribution opportunities for Fruitflow, and it can
be contacted for all Fruitflow sales enquiries by email at
fruitflow@provexis.com .
By-Health Co., Ltd. ('By-Health')
On 4 November 2021 the Company announced it had entered into a
supply and distribution agreement (the 'By-Health Agreement') for
Fruitflow with By-Health, a listed Chinese dietary supplement
business with a market capitalisation of approximately GBP4
billion.
The By-Health Agreement, which followed the Company's extensive
work with By-Health over the last five years, will take full effect
from 1 January 2023 and it gives By-Health exclusive supply and
distribution rights to commercialise Fruitflow in Mainland China,
Hong Kong, Macau, Taiwan and Australia (the 'Territories').
Under the By-Health Agreement Provexis will be responsible for
the manufacture, supply and sale of Fruitflow to By-Health, and
By-Health will be responsible for the manufacture, marketing, and
sale of Fruitflow based functional food and dietary supplement
finished products in the Territories, through By-Health's extensive
sales network. By-Health will also have exclusive rights to act as
the distributor of Fruitflow as an ingredient in the
Territories.
Provexis and By-Health will seek to collaborate on research and
development projects which may result in the development and
approval of Fruitflow as a drug, for potential sale and
distribution in the Territories.
Regulatory progress in China - new permitted health function
claim
The Company has previously announced it has been working with
By-Health to support the planned launch of a number of Fruitflow
based products in the Chinese market, with potential volumes at a
significant multiple of current Fruitflow sales.
The planned launch of Fruitflow based products in the Chinese
market has been progressing well. Clinical studies conducted in
China are typically required to obtain the necessary regulatory
clearances in China, and a significant investment in eight separate
Fruitflow studies has been undertaken at By-Health's expense.
Five studies have been successfully completed in China, and two
clinical studies and one animal study are currently ongoing.
The five completed studies showed excellent results in use for
Fruitflow, and they provide strong evidence for its efficacy on
platelet function. The Chinese regulatory system for functional
health food ingredients such as Fruitflow is governed by the State
Administration for Market Regulation (SAMR), China's top market
regulator, and it is based on a defined list of 27 permitted health
function claims which brand owners are permitted to use on product
labels.
Health function claims are based on test methods and criteria
that have been systematically evaluated and verified, and it is
currently envisaged that the existing list of 27 permitted health
function claims might be reduced to a revised list of 24 permitted
claims. The SAMR provides the possibility of adding new health
function claims to the list, as long as the claim can be evaluated
and verified by the SAMR.
Under SAMR regulations functional health foods need to indicate
a relationship between a food or nutrient and a consequent health
improvement which falls under one of the permitted health function
claims.
SAMR certified functional health foods are required to use a
blue cap / blue hat logo on their product packaging, which
identifies products as approved functional health foods.
By-Health's regulatory clearance preparations for Fruitflow were
originally focussed on obtaining blue cap health claim status for
some Fruitflow based products in China, under the existing 27
permitted health function claim structure.
By-Health is now working on an extensive regulatory submission
to the SAMR for Fruitflow, seeking to establish a new permitted
health function claim for foods such as Fruitflow that can
demonstrate an anti-platelet effect, inhibiting platelet function
and conferring beneficial effects for people who are at risk of
platelet hyperactivity-associated thrombosis.
By-Health has recently updated its website (see
www.by-health.com/en/aboutus ) stating that it has completed:
'Research comprehensively in the cardiovascular health area. We
have developed a new product made with Fruitflow(R), popularly
known as 'natural Aspirin'. It helps to maintain normal platelet
aggregation.'
By-Health currently expects to be in a position to complete the
last of its eight studies in 2022, and it will file its regulatory
submission to the SAMR for Fruitflow at the appropriate time
seeking to obtain a new permitted health function claim which would
be in addition to the currently defined list of 27 (reducing to 24)
permitted claims. Subject to the timing the new anti-platelet
claim, if approved, would therefore represent the 28th - or the
25th - permitted health function claim in China.
If By-Health is successful in obtaining a new permitted health
function claim for functional health foods such as Fruitflow that
can demonstrate an anti-platelet effect, it is currently expected
that this would result in some significant orders for Fruitflow,
potentially at a multiple of current total sales values.
Provexis plc - preliminary results for the year ended 31 March
2022
The Company expects to release its preliminary results for the
year ended 31 March 2022 in September 2022. The Company expects to
report total revenue for the year of GBP426k and an underlying
operating loss of GBP173k. The expected GBP173k underlying
operating loss for the year is 23% ahead of the prior year (2021:
an underlying operating loss of GBP225k) and is an all-time low
number for the business.
Ian Ford, CEO of Provexis, commented:
'We are very pleased to announce the completion of these two new
agreements with DSM, which will position the Company extremely well
for the next stage of its development.
We are also delighted to announce the filing of a new patent
application for Fruitflow, relating to the use of Fruitflow to
confer health benefits in modulating the gut microbiome of humans.
The patent application follows the completion of a successful human
study, the results of which strongly support the use of Fruitflow
for modulating gut microbiota to confer a number of health
benefits. It is particularly encouraging to note that some
potential new uses for Fruitflow were identified in the study, and
have been highlighted in the patent application, looking to treat
some major health conditions which are beyond Fruitflow's long
established and proven use in heart-health.
The Company and DSM have had a strong long-term relationship
over the past twelve years, with the shared interest of both
companies always having been to maximise the commercial returns
that can be achieved from Fruitflow. The Company is very
appreciative of DSM's past help and support, and it looks forward
to building on this relationship in the coming years through the
new gut microbiome partnership, and through ongoing sales of
Fruitflow to DSM's Premix and Market-Ready Solutions
businesses.
The Company looks forward to welcoming and serving the majority
of DSM's existing customers for Fruitflow from January next year,
and is very pleased to be taking over control of the supply chain /
production process for Fruitflow at the same time. There will be
some clear synergies from January 2023 as the Company will be
looking to sell Fruitflow to: (i) former DSM customers for
Fruitflow; (ii) DSM and its Premix and Market-Ready Solutions
businesses; (iii) new customers for Fruitflow as a straight
ingredient; and (iv) By-Health and its customers, through the
Company's long term supply and distribution agreement for Fruitflow
with By-Health. Provexis will continue to sell its Fruitflow+
Omega-3 dietary supplement product direct to consumers, and serve
its Chinese Cross-Border e-commerce distributor for this product in
China. Subscriber numbers on the www.fruitflowplus.com website
remain at an all-time high level.
The Company has developed a strong, long lasting and
wide-ranging patent portfolio for Fruitflow, and it owns outright
four existing patent families for Fruitflow. The new microbiome
patent application takes this to a potential total of five patent
families, with potential patent protection now running out to 2042.
The four existing patent families have a truly global footprint,
and the Company also holds other valuable intellectual property and
trade secrets for Fruitflow. The intellectual property for
Fruitflow is of fundamental importance to the Company and its
current and future commercial partners, to include DSM and
By-Health, and it underpins the numerous commercial opportunities
which the Company and its partners are pursuing for Fruitflow.
The Company expects that the new gut microbiome patent
application, and the other significant changes announced today to
the sales and supply chain structure for Fruitflow, will have a
strongly beneficial effect on the current and future commercial
prospects for Fruitflow and the business worldwide.'
For further information please contact:
Provexis plc Tel: 07490 391888
Dawson Buck, Chairman enquiries@provexis.com
Ian Ford, CEO
Allenby Capital Limited Tel: 020 3328 5656
Nick Naylor / Liz Kirchner
Notes for editors
About Provexis plc
AIM-listed Provexis is focused on the development, licensing and
sales of its proprietary, scientifically-proven Fruitflow(R)
heart-health solutions ingredient.
Fruitflow is a natural, breakthrough ingredient that helps with
platelet aggregation. This helps promote normal blood flow and
circulation, which in turn benefits cardiovascular health.
Fruitflow helps the platelets to circulate freely and smoothly
throughout your blood, without sticking to one another or to the
blood vessels themselves. Freely flowing blood helps reduce stress
on your cardiovascular system.
Fruitflow is a highly concentrated form of bioactives which is
lycopene-free and contains over 30 known anti-platelet compounds.
Published clinical studies have shown that Fruitflow works to
maintain healthy blood flow in a similar way to 75mg aspirin but
with a milder and reversible action; Fruitflow has a similar
antiplatelet effect to a single dose of aspirin - but when taken
daily, it has none of aspirin's side effects.
In April 2022 the U.S. Preventive Services Task Force
www.uspreventiveservicestaskforce.org/uspstf/recommendation/aspirin-to-prevent-cardiovascular-disease-preventive-medication
recommended against initiating low-dose aspirin use for the primary
prevention of CVD in adults 60 years or older.
The science behind Fruitflow has been validated by leading peer
review publications and regulatory authorities. Fruitflow is the
only natural antiplatelet to have a health claim approved by the
European Food Safety Authority, stating that 150mg of Fruitflow
'helps maintain normal platelet aggregation, which contributes to
healthy blood flow'.
Provexis entered into a long-term Alliance Agreement with DSM
Nutritional Products in 2010 to commercialise Fruitflow through
sales as an ingredient to brand owners in the food, beverage and
dietary supplement categories. More than 100 regional consumer
healthcare brands have now been launched by direct customers of
DSM, and a number of further regional brands have been launched
through DSM's distributor channels.
Fruitflow has a number of specific health benefits which have
been reflected in separate patent filings for the use of Fruitflow
in:
-- mitigating exercise-induced inflammation;
-- managing blood pressure; and
-- protecting against the adverse effects of air pollution on
the body's cardiovascular system. Laboratory work has shown that
Fruitflow can reduce the platelet activation caused by airborne
particulate matter, such as that from diesel emissions, by
approximately one third.
Provexis sells a high quality dietary supplement product
containing Fruitflow and Omega-3 from its website
www.fruitflowplus.com on a mail order basis. The product is also
available to purchase from Amazon.co.uk and from Holland &
Barrett.
In November 2021 Provexis entered into a long term supply and
distribution agreement for Fruitflow with By-Health Co., Ltd.
('By-Health'), a GBP4bn listed Chinese dietary supplement business,
to support the planned launch of some Fruitflow based products in
the Chinese market.
The planned launch is progressing well with potential sales
volumes remaining at a significant multiple of existing Fruitflow
sales.
By-Health has made a significant investment in eight separate
studies in China, at its sole expense, in support of the Fruitflow
based products which it plans to launch in China.
The five completed studies showed excellent results in use for
Fruitflow, and they provide strong evidence for its efficacy on
platelet function. The Chinese regulatory system for functional
health food ingredients such as Fruitflow is governed by the State
Administration for Market Regulation (SAMR), China's top market
regulator, and it is based on a defined list of 27 permitted health
function claims which brand owners are permitted to use on product
labels.
By-Health is working on an extensive regulatory submission to
the SAMR for Fruitflow, seeking to establish a new permitted health
function claim for food ingredients such as Fruitflow that can
demonstrate an anti-platelet effect, inhibiting platelet function
and conferring beneficial effects for people who are at risk of
platelet hyperactivity-associated thrombosis.
If By-Health is successful in obtaining a new permitted health
function claim it is currently expected that this would result in
some significant orders for Fruitflow, potentially at a multiple of
current total sales values.
COVID-19
In September 2020 Fruitflow was recognised in a review article
by the Frontiers in Nutrition journal
www.frontiersin.org/articles/10.3389/fnut.2020.583080/full which
stated that nutraceuticals such as Fruitflow may serve as:
'A safe antiplatelet prophylactic treatment for those at high
risk of COVID-19 who may also be at increased risk of thrombotic
complications and an alternative to pharmacological compounds that
may cause greater risk of bleeding.'
Provexis was founded in 1999 and is headquartered in Reading,
Berkshire.
Provexis shares are traded on the AIM market of the London Stock
Exchange under the ticker symbol PXS.
For further information, please visit www.provexis.com and
www.fruitflowplus.com .
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